Legality of Union's Agency-Shop Fees Weighed by Court

Washington--Members of the U.S. Supreme Court last week questioned
whether a Chicago teachers' union would be unjustly harmed if it were
required to modify its procedures for collecting fees in lieu of dues
from nonunion teachers.

A majority of the Justices repeatedly asked the two lawyers arguing
Chicago Teachers Union v. Hudson (Case No. 84-1503) whether they
thought the union's rights would be violated if it had to submit
evidence supporting the way it calculated the fee to a judge or some
other independent ruling authority before it demanded payment from
nonmembers.

See related story, page 9.

The Court's ruling in the case, which is expected to be handed down
by late spring, could affect union finances by forcing changes in
similar "agency-fee" contract provisions in the 17 states with laws
that either permit or require such arrangements. Under such contracts,
all teachers must help pay for benefits won for them by the union.
Previous rulings by the Court, however, exempt nonmembers from having
to support union organizing efforts, lawsuits unrelated to contract
enforcement and negotiation, and political causes that they find
objectionable.

Critics of teachers' unions contend that agency-fee arrangements
represent a "coerced unionism" that violates nonmembers' rights to free
speech and freedom of association. The unions argue that such
arrangements promote labor peace by keeping nonmembers from getting a
"free ride" on the backs of dues-paying members.

At issue in Hudson is the method used by the Chicago affiliate of
the American Federation of Teachers to calculate the nonmembers' "fair
share" fees, as they are known in Illinois. Under the procedure,
outlined in a 1982 labor contract with the city's school board, union
officials calculate the amount of the nonmembers' fair-share fee and
require them to make payments as a condition of continued
employment.

Right to Appeal

The procedure permits a nonmember who wants to challenge the amount
to appeal first to an internal union review panel, then to an
arbitrator selected by the union president, and finally to the state
courts. The nonmember's fee is placed in an interest-bearing escrow
account until all appeals are exhausted.

Last year, the U.S. Court of Appeals for the Seventh Circuit ruled
that the procedure violated the nonmembers' First Amendment rights to
freedom of speech and their 14th Amendment rights to due process of
law. (See Education Week, Sept. 26, 1984.)

The court held that the process lacked reasonable protections for
nonunion employees and therefore "made it likely that some of the money
collected from them will be used to support political objectives not
germane to the union's function in the collective-bargaining
process."

In addition, the court held that requiring a nonunion teacher to
support a union deprives him of freedom of association within the
meaning of the 14th Amendment. Therefore, it said, the teacher must be
afforded due process of law before that right can be taken away.

System Revisions

The court suggested that, at a minimum, the union and the Chicago
board would have to devise a new collection system that provided
dissenting teachers "with fair notice, a prompt administrative hearing
before the board of education or some other state or local agency, and
a right of judicial review of the agency's decision."

The appeals panel noted that the most conspicuous feature of the
process is that the union controls it from start to finish. It said the
problem "would not be so serious if there were an independent
arbitrator at the end--if not the beginning--of the process."

That particular finding appeared to capture the attention of a
majority of the Justices, as indicated by their line of questioning
during last week's hearing.

"Normally, we'd approach a problem like this by saying, 'Yes, there
can be a burden on [both the union and the objecting teachers], but
let's choose the least burdensome method,"' said Associate Justice
Sandra Day O'Connor. "Why can't there be an independent determination
at the outset of the process rather than the method we have here?"

"It all comes back to the same question," added Associate Justice
John Paul Stevens. "Maybe it's not only in the best interest of the
objectors, but in the best interest of the union, too, to have an
independent audit up front."

Labor Peace

Laurence Gold, the lawyer representing the teachers' union,
responded that such action would "violate the government interest in
maintaining labor peace."

"And the unions? It also would violate their interests, too,
right?'' Associate Justice Byron R. White quickly added, noting that
the union could potentially lose revenue if an auditor disallowed
certain costs included by the union in the fair-share fee.

Edwin Vieira Jr., a lawyer from the National Right to Work Legal
Defense Foundation, which is representing the nonunion teachers in the
case, told the Justices he supported the appeals courts' finding that
the 14th Amendment required some sort of audit before fees could be
collected from objecting teachers.

"The union should be required to take their figures to some state
agency," he said. "They have to have some rational basis for their
demand. It does not have to be a full-blown judicial or administrative
hearing, but it does have to be a bit more than a naked demand for
money."

In other action last week, the Court agreed to hear a lawsuit
questioning whether employment-discrimination charges decided by a
state administrative agency could be reargued in federal court.

The case, University of Tennessee v. Elliott (No. 85-588), stems
from the firing of a black employee of the university's Agricultural
Extension Service, allegedly for disciplinary reasons.

The university fired the employee after a hearing before a
quasi-judicial panel of staff members. Last year, a federal appeals
court ruled that the judicial doctrine of res judicata did not prevent
the employee from contesting his dismissal in federal court.

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